Amendment 66: Now is not time for new school tax

Longmont Times-Call

Posted:
10/20/2013 03:18:32 PM MDT

Updated:
10/20/2013 03:20:33 PM MDT

Colorado voters will make an important decision in the Nov. 5 election about how public schools from preschool through 12th grade are funded by taxpayers. The proposed amendment to the Colorado Constitution and a change in state law is expected to increase state tax revenue by $452 million in budget year 2013-14, $950 million in budget year 2014-15, and $1 billion in budget year 2015-16, according to an analysis by the nonpartisan Legislative Council. This is an annual tax.

Income tax rates would be increased for individual taxpayers. The increase if approved will be from 4.63 percent to 5 percent on the first $75,000 of state taxable income and to 5.9 percent on state taxable income above the $75,000 level. Also, the Legislature may adjust this income level annually by inflation. The amendment requires that all new revenue from the tax increase be allocated to P-12 public education.

Major financial backers including national and state teacher associations are spending millions of dollars on the campaign favoring the amendment. They believe that Colorado should raise taxes to make up for the funds to Colorado schools that have been reduced during the recession. Those favoring Amendment 66 say passage will result in the hiring of 1,000 new teachers, reduction of class sizes, investing in preschool and full-day kindergarten, giving principals and teachers more control over budgeting decisions in their schools and upgrading classroom technology.

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People understand the need for good public education opportunities, but voters must ask themselves if this large tax increase is the best way to go about adequately funding and working to improve education in Colorado. This proposal has contributed interesting ideas to the discussion about school funding, but the collective tax increase is too large, the timing is not good -- especially after the state has been hit with a major flood just as it was beginning to show signs of improvement. Taking a total of $1 billion annually out of the hands of Colorado individuals and families in a consumer driven economy would not be the wisest decision at this time.

The Legislature allocated enough financial resources to implement Senate Bill 13-213 for the next year without a tax increase. Also, the Legislature set aside $1.1 billion in budget year 2012-13 and an estimated $290 million in budget year 2013-14 for P-12 public education.

The proposed amendment attempts to make state allocations to all school districts as fair as possible. This is a valid public goal, but voters will decide whether they are willing to accept that taxpayers in some school district will pay more in new taxes than these districts will receive in new revenue. It is a concern that voters in only 114 of 178 districts have approved additional local taxes. Taxpayers will be assessed a state income tax increase of at least 8 percent. Some will see substantially higher increases. Critics of the proposal are concerned that the amendment would require that 43 percent of state income, sales and excise tax revenue, at existing tax rates, would be set aside annually to pay for public education. This could box the Legislature in depending on what future needs or emergencies arise although the average budget share for P-12 education since 2000-2001 has been 46 percent.

Those favoring this annual tax increase and wanting to put it in the constitution argue that a strong education system is the best insurance for a strong state. This is a reasonable thought, but before casting ballots, voters should be reminded that in budget year 2012-13, about $5.5 billion of P-12 public education funding was paid from state and local taxes by individuals and businesses. An additional $2.6 billion in operating revenue outside the funding formula was received including federal funding for all districts and fees assessed by all districts. This includes state income and sales tax and local property and vehicle ownership tax, according to the legislative council. Preschool through grade 12 funding is the largest piece of the state's operating budget.

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